Pumpjacks at work pumping crude oil near Halkirk, Alta., June 20, 2007.

Image Credit: THE CANADIAN PRESS/Larry MacDougal

TORONTO - Canada's main stock index rose slightly to start the week even as oil future contracts plummeted on oversupply pressure.

"This is a historic day. Oil futures were negative for the first time ever," said Michael Currie, vice-president and investment adviser at TD Wealth.

The May contract for North American benchmark West Texas intermediate oil, which expires Tuesday, was down US$55.90 at US$-37.63 per barrel.

The dramatic move was driven by oversupply concerns, as fully stocked airlines and refineries aren't necessarily looking for new oil deliveries.

"Basically, all the big buyers their tanks are full. Demand is way down. So they're sitting on a ton of inventory," he said in an interview.

The June crude contract was in better shape but still decreased more than 18 per cent on the day, falling US$4.60 to US$20.43 per barrel.

Crude oil prices hit their lowest level since 1986 and are down more than 80 per cent since the beginning of the year to levels below break-even that has forced Canadian producers to cut production.

Monday's decrease came despite a deal last week between OPEC and Russia to slash production by 9.7 million barrels per day in a bid to offset some of the falling demand.

The May natural gas contract was up 17 cents at US$1.92 per mmBTU.

Lower crude prices pushed the energy sector down 1.5 per cent on the TSX as Shawcor Ltd., Baytex Energy Corp. and MEG Energy Corp. lost 9.3, 8.8 and 8.8 per cent respectively.

Currie said the sector didn't fall even further because of comments over the weekend from the Canadian government vowing to help the embattled industry.

Consumer discretionary, utilities and industrials were also lower. The consumer sector fell nearly 1.8 per cent with shares of Linamar Corp. losing 3.6 per cent and Restaurant Brands International Inc. down 3.3 per cent.

Technology gained 3.2 per cent as Shopify Inc. enhanced its position as Canada's third-most valuable company with its shares gaining 6.7 per cent. Earlier in the day, Shopify's market value briefly surpassed that of TD Bank for the No. 2 spot.

Higher gold prices helped the materials sectors to expand 2.3 per cent while health care was higher with cannabis producer Aurora Cannabis Inc. up 5.1 per cent.

The June gold contract was up US$12.40 at US$1,711.20 an ounce and the May copper contract was down almost 2.45 cents at US$2.32 a pound.

"I think just a lot of the panic on oil has got people looking more to gold," said Currie.

The S&P/TSX composite index closed up 28.40 points at 14,388.28 after a 434-point swing on the day.

In New York, U.S. markets were all lower with the Dow Jones industrial average losing 592.05 points or 2.4 per cent at 23,650.44. The S&P 500 index was down 51.40 points at 2,823.16, while the Nasdaq composite was down 89.41 points at 8,560.73.

The Canadian dollar traded for 70.99 cents US compared with an average of 71.24 cents US on Friday.

Currie said people are now debating if markets have come back too far, too fast during the upswing in the last few weeks.

"Before we get to real stable recovery, I think it needs to see the financial start to recover a bit, and we're not seeing that yet."

This report by The Canadian Press was first published April 20, 2020.

Companies in this story: (TSX:SHOP, TSX:ACB, TSX:LNR, TSX:QSR, TSX:SCL, TSX:BTE, TSX:MEG, TSX:GSPTSE, TSX:CADUSD=X)

News from © The Canadian Press, 2020